JACKSONVILLE, Fla. – FBI special agent Angela Hill, a member of the local public corruption squad, returned to stand on Friday to describe her work as from the early stages of the investigation into two former JEA executives who are accused in a complex conspiracy.
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Former JEA CEO Aaron Zahn and former JEA CFO Ryan Wannemacher are facing federal charges of conspiracy and wire fraud in connection with the utility’s proposed sale, which could have netted the pair and other JEA executives millions of dollars through a controversial bonus plan tied to the sale.
The pair are being tried together but separate juries were picked for each defendant last week.
Following her testimony on Thursday, questioning picked up Friday morning with the June 25, 2019, JEA board meeting, where executives presented “Scenario 2,” known as the “Traditional Utility Response,” which executives said would involve large rate hikes, significant layoffs, and the potential end of JEA’s financial contribution to the city, for JEA to deal with financial challenges.
There was brief testimony about meetings at Club Continental in Orange Park, on July 10 and 11 of 2019. Hill said it was a meeting of JEA executives and some investment bankers, to discuss a potential sale of JEA. That meeting took place before the “non-traditional response,” which opened the door to a sale, had been presented to the board.
Hill testified about emails sent from JEA staff to board members in advance of the next board meeting, held on July 23, 2019. An email on July 17 informed board members that the board packet, a collection of materials provided to members before meetings, would not be posted on an online platform, as it typically was. Instead, a hard copy would be delivered to their homes. A portion of the board packet was posted on the JEA website before the meeting, but the entire board packet wasn’t posted online until around 2:15 p.m. that day, following the meeting.
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The testimony then shifted to the July 23 board meeting. With a series of video clips from the meeting shown by prosecutors, Hill explained how JEA leaders presented an implementation plan for Scenario 2, which involved a seven-month timeline for carrying out most of the 574 layoffs called for under the scenario. In the meeting clips. Wannemacher presented Scenario 3, the “Non-Traditional Utility Response,” which outlined a variety of options, from converting JEA to a co-op, the utility issuing an initial public offering, and the utility being acquired by an investor-owned utility.
Wannemacher’s presentation also included the minimum requirements to move forward with a Scenario 3 option, including a minimum of $3 billion in value to the city, more than $400 million distributed to customers through account rebates, and protection of certain employee benefits.
Prosecutors and Hill also walked through some of the steps with the Invitation to Negotiate, or ITN. This was the process by which JEA solicited bids for the utility. Hill detailed the different “revised replies,” which were the amounts companies were prepared to offer for some or all of JEA. The largest bid came from NextEra, the parent company of FPL, which was prepared to offer just over $11 billion for JEA. The ITN was cancelled on Dec. 24, 2019.
Hill’s questioning by the prosecutors wrapped up with a discussion of what’s known as the “Diamond-Salem hearing,” a special city council hearing called by Rory Diamond and Ron Salem on Dec. 16, 2019, for the purposes of looking into the proposed bonus plan. Zahn and Wannemacher both appeared at the hearing. Prosecutors showed clips from that day, including Zahn’s opening statement, where he said, “It is in this manner that I am here today to state I made an error in judgment.”
Zahn attorney Eddie Suarez then spent about two-and-a-half hours Friday questioning the FBI agent. Much of that testimony involved playing other clips from JEA board meetings, including some of the meetings that had just been shown earlier. Suarez made a point that the JEA board never agreed to sell the utility, with Hill replying that the board had approved a process to sell the utility. He also walked through the different layers of approval that would have been needed in order for a sale and for the bonus plan to be implemented.
Hill will return to the stand Monday morning for additional questions from prosecutors. Some of Monday’s subsequent witnesses include members of the city’s Council Auditor’s Office, which was involved in analyzing the proposed bonus plans and raising concerns about it in the fall of 2019.
The trial is expected to last four weeks. Zahn and Wannemacher could get up to 25 years in prison if convicted on all charges.
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